ECB made the day for the sellers. Yes, the European Central Bank cut the interest rate to a record low at 0.25% down from 0.5%, which led the euro to plunge instantly against the greenback and lost 200 points in quick succession. The pair fell from the 1.3500 area down to 1.3300 where the bulls entered to complete the bullish retracement. The euro lost massively which again was quite healthy as it gained 140 points that completed 61.8% retracement on the Fibonacci scale.
Currently the pair is trading at 1.3422 in the Asian session on Friday where chances are that the euro would further lose again but investors may hold themselves back as they are looking forward to a big one. Yes, the non-farm payrolls and the U.S. unemployment rate data are set to be released today in the U.S. session and this is happening after 2 months.
Much depends on this data as it gives the outlook over the condition of the U.S. economy, but we suggest traders to remain cautious because the market may give mixed movement. This happens generally when the day before NFP the market witnesses heavy movement, so setting your stop losses while trading is highly recommended.
Sellers should feel safe to short the pair as long as it remains below 1.3520, above this level would allow the bulls to take control of the pair.
Pound is Safe for now
The investors did what was expected. Even though the euro and the Aussie slumped notably on Thursday, but the British pound remained firm but instead gained enough to test its Wednesday’s high at 1.6118. And of course it is because the good data releases for the U.K. economy this week, where the services and construction sector both showed sharp improvement and healthy economic activity. Therefore, allowing the investors’ confidence to flow in and go long on the pair. It is quite safe to remain in buy for the pair as long as it trades above 1.60075, but if it breaks 1.6118 then its next targets would be 1.6139 and 1.6150.
Gold Back in Shape
Gold dropped down on the good quarterly GDP of the U.S. and tested the 1296 support level, but managed to gain and come back above 1300 level and is currently trading at 1305. All eyes are on NFP data, where a move below 1296 can lead it to 1283, below which it could go down to 1269. A move above 1323 would allow the metal to gain and test 1331 and 1343.
To contact the reporter of this story: Jonathan Millet at email@example.com